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Baker pressing to raise insurance contributions of state workers

The Lowell Sun

Updated:
07/14/2016 02:09:26 PM EDT

By Matt Murphy

STATE HOUSE NEWS SERVICE

BOSTON -- Gov. Charlie Baker issued hundreds of vetoes to the state budget he signed last week, but at least one in particular is being viewed as a key piece of his plan to keep state spending balanced by raising health care premiums for state employees.

The administration sees the move as one designed to create parity for all state employees who currently pay different percentages of their health insurance premiums based on when they were first hired.

By raising the employee contribution, the governor also sees a way to save roughly $30 million in this year's budget, and put state employee benefits on a more even plane with private sector workers.

"The administration communicated that this provision to save taxpayers roughly $30 million and bring the state system more closely in line with what private sector workers pay is one of several important provisions the governor employed to balance the budget," Baker senior advisor Tim Buckley told the News Service.

Administration and Finance Secretary Kristen Lepore has impressed upon leaders in the House and Senate Ways and Means committees that sustaining the governor's veto is a critical component to keeping the budget balanced without having to trim from other programs.

While many earmarks and other spending vetoes, should they be overridden, could be cut later in the year if necessary by executive authority, the health insurance policy could not be changed without legislative action.

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Currently, state employees hired before 2003 pay 20 percent of their health plan premiums, while employees hired after 2003 have a 25 percent contribution rate. Baker has twice filed to raise the contribution rate for all employees to 25 percent, but the Legislature both times has refused to go along.

This year Baker vetoed a line in the budget that the administration says will allow it to increase the rate administratively, saving the state $30 million on health plans offered through the Group Insurance Commission.

According to the Center for Health Information and Analysis, the average individual employee contribution rate in Massachusetts for private sector workers has climbed from 20.2 percent in 2003 to 28 percent in 2014. For family plans, the employee share of premiums grew from 25 percent to 31 percent over the same period.

Based on the average annual premium in 2014 of $6,420 for an individual plan in the private sector, state employees would be paying roughly $514 less per year than their counterparts outside of government if they were hired before 2003.

Employees hired after 2003 and paying the 25 percent premium share would still pay $193 less than the average private sector worker, based on CHIA's data from 2014.

The local chapter of the National Association of Government Employees did not respond to a call seeking comment on the governor's plan, while the Massachusetts AFL-CIO last year warned that Baker's identical proposal, along with increases in co-pays and deductibles on GIC plans, would cost employees $160 million collectively with many families on a state health plan realizing a $1,500 jump in health costs.

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